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Broward Motorsports of Palm Beach, LLC v. Polaris Sales, Inc.

United States District Court, S.D. Florida

February 27, 2018




         THIS CAUSE is before the Court upon Defendant Polaris Sales, Inc.'s (“Defendant”) Motion to Dismiss First Amended Complaint, ECF No. [22] (“Motion”). The Court has carefully reviewed the Motion, all opposing and supporting materials, the record in this case, the applicable law, the arguments made by the parties at the hearing held on January 19, 2018 and is otherwise fully advised. For the reasons set forth below, the Motion is granted.

         I. BACKGROUND

         Plaintiff, Broward Motor Sports of Palm Beach, LLC (“Plaintiff”), filed a four-count First Amended Complaint (“FAC”) against Defendant asserting claims for fraudulent concealment in Count 1, fraudulent inducement in Count 2, violation of Florida's Deceptive and Unfair Trade Practices Act (“FDUTPA”) in Count 3, and breach of the implied covenant of good faith and fair dealing in Count 4. See ECF No. [20]. Plaintiff is a dealer of motor vehicles while Defendant is a manufacturer of motor vehicles including the line of Victory Motorcycles at issue in this lawsuit. Id. at ¶ 6. According to the FAC, Plaintiff entered into an asset purchase agreement with non-party TTB Enterprises, Inc. (“TTB”) for the purchase of its assets, including a franchise dealership/license agreement between Defendant and TTB. Id. at ¶ 7. The asset purchase agreement was conditioned upon, in part, Defendant's written approval allowing Plaintiff to act as its licensed franchise dealer. Id. On November 14, 2016, Defendant notified the Florida Division of Motor Vehicles (“DMV”) that it approved of Plaintiff as a new dealer of its Victory Motorcycles line. Id. at ¶ 9. The FAC also alleges that as early as November 14, 2016, Defendant knew it would be terminating the Victory Motorcycles line within the next two months. Id. at ¶ 8. Thereafter, on December 8, 2016, Defendant and Plaintiff entered into the Polaris Dealer Agreement, which authorized Plaintiff to act as a dealer of the Victory Motorcycles line from July 1, 2016 until June 30, 2017 (the “2016-2017 Dealer Agreement”). Id. at ¶10. And, on the next day, Defendant sent Plaintiff a letter that stated, in part, as follows:

Congratulations! Your application has been approved and you are set up as a new Polaris dealer for ATV, SXS (Collectively ORV), Slingshot, Victory, Brutus & GEM. . . .
We look forward to a long and profitable relationship. Welcome to the Polaris family of dealers!

See ECF No. [20-2].

         Four days later, on December 13, 2016, Plaintiff closed on its asset purchase agreement with TTB and acquired its rights to sell the Victory Motorcycles line. Id. at ¶ 12. Approximately three months later, on March 9, 2017, Defendant sent Plaintiff a letter indicating it would be winding down and terminating the Victory Motorcycles line and would not renew the dealership agreement for that particular line in July of 2018. See ECF No. [20-3]. Two months later, on May 18, 2017, Plaintiff and Defendant entered into the 2017-2018 Dealer Agreement for the Victory Motorcycles line, which had a term of July 1, 2017 to June 30, 2018. See ECF No. [20-4].

         With this background in mind, Plaintiff alleges claims for fraudulent concealment and fraudulent inducement. Both claims are premised upon Florida Statute § 320.641, which provides that “[f]ranchise agreements are deemed to be continuing, unless the applicant or licensee has notified the department of the discontinuation of, cancellation of, failure to renew, modification of, or replacement of the agreement of any of its motor vehicle dealers.” See ECF No. [20] at ¶ 18. According to the FAC, this statutory language was grafted onto the 2016-2017 Dealer Agreement and overwrites any non-renewal language within the agreement. Id. at ¶ 19. On this basis, Plaintiff alleges that, at the time it entered into the 2016-2017 Dealer Agreement, it relied upon the protection of this statute, Defendant's written and verbal representations that it was looking forward to a “long and profitable relationship, ” and the ability to renew the dealership agreement to sell the Victory Motorcycles line beyond June 30, 2018. Id. at ¶ 20. Specific to the fraudulent concealment count, Plaintiff alleges that Defendant knew it would not renew its dealership rights beyond June 30, 2018, that it had a duty to disclose that information to Plaintiff, and that it instead concealed that information. Id. at ¶¶ 21-23. As to fraudulent inducement, the FAC alleges that Defendant's representations about the long and profitable relationship were untrue as it did not intend to renew Plaintiff's dealership rights to sell and service Victory Motorcycles beyond June 30, 2018. Id. at ¶ 29. In Count 3, Plaintiff asserts a claim for a statutory violation of FDUTPA, invoking Florida Statute § 501.204(1), which makes it unlawful to engage in any unfair or deceptive acts or practices in the conduct of any trade or commerce. Id. at ¶ 35. According to the FAC, Defendant's failure to disclose that it would not renew the dealership agreement for Victory Motorcycles after June 30, 2018 was a deceptive and unfair trade practice. Id. at ¶ 37.

         In response to the FAC, Defendant filed a Motion to Dismiss all counts with prejudice. See ECF No. [22]. Plaintiff filed a Response opposing dismissal of Counts 1, 2, and 3 but agreeing to withdraw Count 4.[1] See ECF No. [29]. Defendant filed a timely Reply. See ECF No. [30]. The Court thereafter held oral argument and the Motion is now ripe for adjudication.


         A pleading in a civil action must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). Although a complaint “does not need detailed factual allegations, ” it must provide “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007); see Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (explaining that Rule 8(a)(2)'s pleading standard “demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation”). Nor can a complaint rest on “‘naked assertion[s]' devoid of ‘further factual enhancement.'” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 557 (alteration in original)).

         When reviewing a motion under Rule 12(b)(6), a court, as a general rule, must accept the plaintiff's allegations as true and evaluate all plausible inferences derived from those facts in favor of the plaintiff. See Miccosukee Tribe of Indians of Fla. v. S. Everglades Restoration Alliance, 304 F.3d 1076, 1084 (11th Cir. 2002); AXA Equitable Life Ins. Co. v. Infinity Fin. Grp., LLC, 608 F.Supp.2d 1349, 1353 (S.D. Fla. 2009). However, this tenet does not apply to legal conclusions, and courts “are not bound to accept as true a legal conclusion couched as a factual allegation.” Twombly, 550 U.S. at 555; see Iqbal, 556 U.S. at 678; Thaeter v. Palm Beach Cty. Sheriff's Office, 449 F.3d 1342, 1352 (11th Cir. 2006). Moreover, “courts may infer from the factual allegations in the complaint ‘obvious alternative explanations, ' which suggest lawful conduct rather than the unlawful conduct the plaintiff would ask the court to infer.” Am. Dental Ass'n v. Cigna Corp., 605 F.3d 1283, 1290 (11th Cir. 2010) (quoting Iqbal, 556 U.S. at 682). A court considering a Rule 12(b) motion is generally limited to the facts contained in the complaint and attached exhibits, including documents referred to in the complaint that are central to the claim. See Wilchombe v. TeeVee Toons, Inc., 555 F.3d 949, 959 (11th Cir. 2009); Maxcess, Inc. v. Lucent Techs., Inc., 433 F.3d 1337, 1340 (11th Cir. 2005) (“[A] document outside the four corners of the complaint may still be considered if it is central to the plaintiff's claims and is undisputed in terms of authenticity.”) (citing Horsley v. Feldt, 304 F.3d 1125, 1135 (11th Cir. 2002)).


         a. Count 1 - ...

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